Acquisition Of Land On A Faulty Agreement- A Loophole For Fraud

By S.O. Giwa Esq

It is no news that the preparation of land sale agreements for parties to the land sale transaction is not an exclusive act to legal practitioners in Nigeria. Without mincing words, many Nigerians prefer the preparation of their land sale agreements by lawyers to non-lawyers for reason best known to them.

Research shows that copy-cat approach under the disguise of using precedent for a draft of new agreement for sale of land is the ubiquitous practice of many lawyers including non-lawyers in preparing the land sale agreements for the execution by the parties.

One keeps wondering if the facts in the sale of land in Nigeria are one and the same for the use of a precedent on a land sale agreement prepared by another lawyer for many years or months to be resorted to hook line and sinker.

Further reading through some executed agreements by some parties on the sale of some pieces of land evinced that the preparation of those agreements are faulty for want of detailed facts which agreements for the land sale are to contain and state clearly for the agreement to speak for itself on the detailed information required.

It is against the foregoing that this piece is written with a view to discussing five (5) fundamental parts of the land sale agreement which required detailed information in an agreement and stating their importance in an agreement to assist young lawyers and any interested senior lawyers who are desirous of broadening their horizons and adding to their repertoire.

What then is a land purchase agreement?

A Land Purchase agreement is a formal contract by which a vendor agrees to sell, and the purchaser agrees to buy a piece of land under specific terms and conditions spelled out in writing in the agreement signed by both parties. It is the preliminary document that must be prepared and signed by parties when a vendor wishes to sell a piece of land to the purchaser.

Flowing from the definition that a land sale agreement is the reduction of terms and conditions agreed thereto by the parties into writing and consequently executed by the parties is the fact that for an agreement to evidence a sale of any piece of land by any person who claims to be the owner of the sold land, the executed document which termed to be a land sale agreement must spell out in details the required elements of agreement to avert any loophole for fraud.

It is important to say here that many documents which many buyers of land hold on to as land sale agreements are either bereft of detailed description of the vendors vis-à-vis the detailed vendors’ residential addresses to which the vendors could be traced to in the event of a challenge to their titles to land that were transferred to the buyers or brief details about the land and how the vendors’ titles to the land were derived. What then are the five (5) fundamental parts of land sale agreement?

The five (5) fundamental parts of agreement are:

PARTIES CLAUSE      

A land purchase agreement is created when two parties deal with each other and these parties are VENDOR and PURCHASER. Under this clause, the land sale agreement must contain the full details of the vendor and the purchaser, such as names and addresses. It is noteworthy that there is no rule or law restricting the description of parties to an agreement to the vendor and the purchaser. The description of parties depends on agreement to be prepared. Where the agreement is a Deed of Transfer, parties are described as transferor and transferee respectively. Also, where the document is for assignment, parties are described as Assignor and Assignee. All that is needed to be borne in mind in describing the parties under this clause is that the description of parties vis-à-vis names and addresses must be in details. For example, the description of vendor hereunder is fundamentally defective and gives chance for fraud.

‘ThIS AGREEMENT is made this … Day of …………, 20…. BETWEEN Mr. Olaiya a.k.a. Ogbonpo’ of Ashi Bodija, Ibadan Oyo State hereinafter referred to as the ‘VENDOR’

From the description of the vendor in the above, it is an indisputable fact that the vendor’s name given as Mr. Olaiya a.k.a Ogbonpo and his address ‘Ashi Bodija, Ibadan, Oyo State is not detailed enough to trace the vendor if need be and such description is not only faulty but also creates loophole for fraud which must be guided against in an agreement for a sale of land.

Besides the parties clause discussed above is the RECITAL CLAUSE which is the most fundamental clause in an agreement for the sale of land. The recital clause in the land sale agreement states the brief details about the land and how the vendor derived his claimed title to the land. It is under the recital clause in an agreement that the explanation of how the vendor became the owner of the land which he is disposing of is given.

Research has also shown that many agreements for the sale of land are found wanting under this recital clause. Fortifying the writer’s submission are the below paragraphs curled out under the recital clause of an agreement that has been fully executed for many years back in respect of a piece of land.

‘WHEREAS

1. THE Vendor became seised of a piece or parcel of land measuring one acre, situate, Iying and being at ……………………. Village, Moniya, Akinyele local Government Area, Ibadan, Oyo State of Nigeria by purchase from XXY.
2. The purchase recited above is free from any encumbrances.
3. The vendor has agreed to sell and did sell and the Purchasers have agreed to buy and did buy 1 plot of land out of the said one acre, situate and being at …………………….. Village, Moniya, Akinyele Local Government Area, Ibadan, Oyo State of Nigeria for a consideration to be hereinafter stated.’

It is not in doubt that some readers may want to argue that the brief details of the land in question and how vendor became the owner of the land were given in the above paragraphs. The questions to pose to quench the thirst of arguments are:

1. Was there detailed address of the XXY from whom the vendor bought the land given?
2. Was the year which XXY bought the land provided?
3. Was any reference to any land sale agreement for the purchase of the land by XXY made in any of the paragraphs?
4. Are paragraphs 2 and 3 reproduced above the expected details required under the recital clause?

It is the writer’s stand that the answers to all the above questions are in negative as the quoted paragraphs under recital clause of that agreement run contrary to the required details of how the vendor’s title to the land was derived that are expected to be stated under the recital clause.

It is also noteworthy that the purpose of the required detailed explanation of how the vendor became the owner of the land which he/she is disposing of under the recital clause is that a recital clause provides the reader with a general idea about the purpose of the contract, the parties involved, and why the parties signed the agreement. Also, the recital clause in an agreement not only plays a valuable role in helping third parties entering into, or reviewing, the agreement later in time to understand the source of vendor’s title to the land in question but also serves as first point of reference in preparing pleading in a litigation in respect of the land. Hence, the recitals are the preamble to the land sale agreement.

It is also noteworthy that there is no prescribed format for drafting recitals, but they typically contain concise statements of fact, describing key circumstances and details relevant to the establishment of the contract of sale of land. Expressions of intent and references to any related contracts may also be included under recital clause.

Next to the Recital Clause is the PURCHASE PRICE/CONSIDERATION CLAUSE

which is also an essential element of the land purchase agreement. Under this

clause,  the method of payment of the purchase price must be equally mentioned

as stating that under that clause would avert any denial of the receipt of money

for the sale of the land. The below specimen may be of help.

‘That pursuant to the foregoing having been reached between the VENDOR and the PURCHASER and in consideration of the purchase price of TWO MILLION, TWO HUNDRED AND FIFTY THOUSAND (N2, 250,000.00) NAIRA ONLY paid by the PURCHASER to the VENDOR through ……………….(insert the name) via electronic transfer in three instalments into his account number ……………… with Guaranty Trust Bank (GTB) on 11^th day of March, 2021, 29^th day of March, 2021 and 13^th day of March, 2021 respectively for the purchase of five acres of land described in this document as the PURCHASED LAND’. The VENDOR hereby acknowledges the receipt of same and a receipt number …….dated …….. was issued to ……………….(insert the name) for the sale of ‘Purchased land’.

Besides the aforementioned clauses discussed above is COVENANTS/ INDEMNITY CLAUSE wherein the vendor and the purchaser must undertake specific responsibilities under the land purchase agreement. It is pertinent to note that not only the vendor that must agree to indemnify the purchaser against all claims, demands, disturbance, or interruption, which may arise from any defect in the vendor’s rights or title to the land, the buyer must also undertake to make the full payment for the land if the purchase price is to be paid on instalments. The buyer must also undertake to abide by all other covenants stipulated in the agreement. The below specimen may be of help

‘‘The VENDOR shall indemnify the PURCHASER against any defect arising out of title to the said land which may militate against peaceful and undisturbed occupation of the ‘Purchased land’ and the PURCHASER shall be entitled to a refund of the purchase price and all other damages arising from defect which deprive the PURCHASER’S peaceful and undisturbed enjoyment of the aforesaid land.

The VENDOR with the object and intention of offering to the PURCHASER  a full and sufficient indemnity hereby covenants that the ‘Purchased land’ hereby sold, transferred and assigned will be quietly enjoyed by the PURCHASER and his/her successor-in-title without any hindrance or interruption by the VENDOR or any person(s) claiming through the ownership thereof and that the VENDOR  if called upon to do so will at the request of the PURCHASER or any person(s) deriving title under his/her authority do all such lawful assurances and things particularly with regard to seeking and obtaining of the consent and approval of the local government or any other approving authority for further and more perfectly assuring the property hereby sold to the PURCHASER as shall be reasonably required.

The VENDOR further covenants with the PURCHASER to keep perform and observe all the covenants, terms and conditions herein before appearing and to execute further or other documents as may be necessary and required in order to complete the conveyance of the said land in favour of the PURCHASER.’’

Lastly, a termination clause must also be expressly stated the mode of termination of the agreement where one of the parties defaults under any terms agreed upon in the agreement.

It is important to conclude this piece by saying that there is no cast in stone that the preparation of a land sale agreement must be done by the vendor’s lawyer.

It is hereby advised that much as facts of two cases cannot be the same, so also agreements of sale of two different land by different vendors cannot be the same.

Finally, it is the writer’s stand that a land sale agreement which fails to have detailed information stated in any of the five fundamental parts of it gives room for being defrauded by Fraudsters.

The writer finally urges the young lawyers to feel free to interact with other colleagues or seniors for any grey area in their practice of law and lawyers should always remember that no one knows it all.

Written By S.O. Giwa Esq. a.k.a pentalk (Ibadan based Legal Practitioner) giwa_pentalk@yahoo.com, 08035224192